The Union Cabinet has approved amendments to the General Insurance Business (Nationalisation) Act (GIBNA). It is likely to be tabled in the Parliament in the monsoon session. As per reports, LIC’s IPO may be launched early next year, and a 10 per cent stake sale will fetch Rs 1-1.5tn to the exchequer. The government is also expected to divest stake (through OFS) in National Fertilizers Ltd., Mishra Dhatu Nigam Ltd., and Rashtriya Chemicals and Fertilizers Ltd., in Q3 2021-22.

RBI’s newly constructed digital payment index has risen sharply by 30.2 per cent in 2020-21 signaling the 'rapid adoption and deepening of digital payments in India. The new index is based on 5 parameters including: Payment enablers (weight 25 per cent), payment infrastructure-demand-side (10 per cent), payment infrastructure-supply side (15 per cent), payment performance (45 per cent) and consumer centricity (5 per cent). The base year has been taken as March 2018 and it is expected to be published on a semi-annual basis with a lag of four months.

The US GDP rose by 6.5 per cent in Q2CY21 (est. 8.5 per cent) versus 6.3 per cent in Q1. Gross private domestic investment fell by 3.5 per cent from a 2.3 per cent decline in Q1. On the other hand, personal consumption expenditure rose by 11.8 per cent from 11.4 per cent in Q1, led by services (12 per cent versus 3.9 per cent). Exports increased by 6 per cent from 2.9 per cent decline in Q1. Imports rose at a softer pace of 7.8 per cent from 9.3 per cent in Q1. In a separate print, US jobless claims fell by 24K to 400K for the week ending 24 Jul 2021.

Markets

Bonds: Except for the US (higher) and China (lower), global yields are stable. US 10Y yield rose by 4ps (1.27 per cent) supported by better jobless claims data. Crude prices rose by 1.8 per cent (US$ 76/bbl) as sharp drawdown in US inventories and faster pace of vaccination led to improved demand outlook. India’s 10Y yield closed stable at 6.23 per cent. New benchmark security ended a tad higher by 1bps (6.2 per cent) ahead of the weekly auction.

Currency: Global currencies closed higher against the dollar. DXY fell by 0.5 per cent as US GDP rose less than expected in Q2CY21. EUR and GBP both rose by 0.4 per cent. CNY rose by 0.5 per cent as China’s stock market stabilised. INR also rose by 0.1 per cent supported by global cues even as oil prices rose. It is trading flat today, while other Asian currencies are trading lower.

Equity: Global indices ended higher as investors monitored corporate earnings and Fed's dovish comments. Shanghai Comp rebounded sharply from the early week sell-off and surged by 1.5 per cent. This was followed by FTSE (0.9 per cent) and Nikkei (0.7 per cent). Sensex (0.4 per cent) too ended in green led by gains in metals and real estate stocks. It is trading higher today, while other Asian stocks are trading lower.

[Based on inputs from Bank of Baroda]